BTC Slips Below $56K as Labor Data Sparks Rate Cut Bets; ETF Outflows Continue

Bitcoin Dips Below $56,000 as the US Jobs Report Looms

On Wednesday, September 4, BTC saw a 0.85% gain, partially recovering from a 2.77% loss in the previous session, closing at $58,018. Significantly, BTC slid to a session low of $55,663 before recovering.

Weaker Labor Data Supports BTC

On Wednesday, investors responded positively to weaker-than-expected labor market data. The JOLTs Report showed job openings fell from 7.910 million in June to 7.673 million in July. Deteriorating labor market conditions may affect wages, possibly curbing consumer spending and impacting the US economy. Private consumption accounts for over 60% of GDP.

The slide in job openings also fueled investor bets on a possible 50-basis point September Fed rate cut. According to the CME FedWatch Tool, the probability of a 50-basis point September Fed rate cut increased from 38.0% to 45.0% on Wednesday.

US BTC-spot ETF Market Eyes Six-Day Outflow Streak

While the US labor market data fueled investor fears of a US economic recession, US factory orders sent a more upbeat signal. Factory orders surged by 5.0% in July, after a 3.3% fall in June. The mixed signals left the Nasdaq Composite Index down 0.30% for the session.

The US BTC-spot ETF market also struggled amidst ongoing uncertainty about the US economy. According to Farside Investors:

• Grayscale Bitcoin Trust (GBTC) saw net outflows of $34.2 million
• Fidelity Wise Origin Bitcoin Fund (FBTC) had net outflows of $7.6 million.
• VanEck Bitcoin Trust (HODL) reported net outflows of $4.9 million.

Excluding iShares Bitcoin Trust (IBIT) and Valkyrie Bitcoin Fund (BRRR), US BTC-spot ETFs saw $37.2 million in net outflows, possibly marking a six-day outflow streak.

Upcoming US Economic Data Could Impact BTC Demand

On Thursday, September 5. Investors should consider the US economic calendar amid speculation about a US economic recession. US labor market data, including ADP employment change and jobless claims, will influence market risk sentiment and the Fed rate path.

However, the ISM Services PMI could be pivotal ahead of Friday’s US Jobs Report. A larger-than-expected fall in the Services PMI may signal a hard landing, possibly impacting BTC demand. Economists expect the PMI to drop from 51.4 in July to 51.1 in August.

Investors should stay vigilant as shifting sentiment and supply-demand trends may affect BTC demand. Stay updated with our latest news and analysis to manage exposure to BTC and the broader crypto market.

Technical Analysis

Bitcoin Analysis

BTC remained below the 50-day and 200-day EMAs, confirming bearish price trends.

A breakout from the 200-day EMA would support a move toward the $60,365 resistance level and 50-day EMA. Furthermore, a break above the 50-day EMA could give the bulls a run at the $64,000 resistance level.

US economic data, sentiment toward the Fed rate path, and BTC-spot ETF market flow trends require consideration.

Conversely, a drop below $57,500 may give the bears a run at $55,000. A fall through $55,000 might bring the $52,884 support level into play.

With a 43.25 14-day RSI reading, BTC may fall below $55,000 before entering oversold territory.

Ethereum Analysis

ETH hovered below the 50-day and 200-day EMAs, confirming bearish price trends.

An ETH breakout from $2,500 could support a move toward the $2,664 resistance level. Furthermore, a break above the $2,664 resistance level may give the bulls a run at $2,800.

US ETH-spot ETF market-related updates also require consideration.

Conversely, an ETH break below the $2,403 support level could bring the $2,124 support level into play.

The 14-period Daily RSI reading, 40.14, indicates an ETH fall to the $2,124 support level before entering oversold territory.